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Monday, 01 April 19
FORCE MAJEURE SUCCESS NOT A SEA CHANGE - BALTIC EXCHANGE
 KNOWLEDGE TO ELEVATE
It is difficult to successfully argue that contractual performance has been prevented or delayed by force majeure. This is in part because English courts or arbitration tribunals will interpret these clauses strictly and narrowly against the party seeking to rely on them.
Recent decisions, including Triple Point Technology v PTT (2017) and Seadrill Ghana v Tullow Ghana (2018), are evidence of this approach. However, Sucden Middle-East, represented by Nick Fisher of HFW, has recently relied successfully on such a clause in the Commercial Court, on appeal from arbitration.
The case, Sucden Middle-East v Yagci Denizcilik Ve Ticaret Limited Sirketi, “The Mv Muammer Yagci”, involved a shipment of sugar to Algeria on the Sugar Charter Party 1999 form. The facts found by the arbitral tribunal were that when the cargo arrived in Algeria, the cargo-receivers submitted false import documents to local customs authorities. The local customs responded by seizing the cargo, using powers under customs laws and regulations.
A delay to discharging the cargo of four and a half months ensued. Sucden, as charterers, claimed this delay fell within the exceptions to laytime running under clause 28. Owners disagreed. At first instance, the arbitral tribunal agreed with owners.
Charterers appealed to the Commercial Court. Permission to bring the appeal was given on the basis that the question of law was one of general public importance, as it related to a standard form contract in wide commercial usage.
The judgement
The question before the Commercial Court was: “Where a cargo is seized by the local customs authorities at the discharge port causing a delay to discharge, is the time so lost caused by ‘government interferences’ within the meaning of clause 28 of the Sugar Charter Party 1999 form?” Clause 28 reads:
“Strikes and Force Majeure
In the event that whilst at or off the loading place or discharging place the loading and/or discharging of the vessel is prevented or delayed by any of the following occurrences: strikes, riots, civil commotions, lockouts of men, accidents and/or breakdowns on railways, stoppages on railway and/or river and/or canal by ice or frost, mechanical breakdowns at mechanical loading plants, government interferences, vessel being inoperative or rendered inoperative due to terms and conditions of employment of the Officers and Crew, time so lost shall not count as laytime on demurrage or detention…”
In deciding whether a force majeure event had occurred, the Court focused on the construction of “government interferences”. It was fairly straightforward to establish that a government entity acting in a sovereign capacity was involved, but owners argued that the government being involved was not enough and that there had to be “interferences”. In reaching its decision that there had been no interference, the tribunal had considered it a key point that seizure was an “ordinary” action. The Court rejected this conclusion. It held that the seizure of the cargo was not routine and did fall within the meaning of “interferences”. Seizure is a significant exercise of executive power and therefore could not be regarded as “ordinary”. Suspected or predictable consequences are not the same as ordinary actions (such as the inspection of the cargo by a government surveyor): “In the usual course of things, cargo is not seized and property rights are not invaded in that way.” The very fact that false documents were involved showed that the circumstances were not routine.
The Court emphasised that it was of “real importance” that its conclusion on the language was not difficult to apply, nor did it in any way offend commercial common sense.
The owners’ causation argument was also dismissed, as it was held that the seizure caused the delay, even if the submission of false documents caused the seizure.
Further detail
In allowing the appeal, the Court still maintained the strict and narrow approach to force majeure, stressing that “the answer given to the question is only a narrow ‘yes’. It is ‘yes’ where the circumstances are as in the present case. The answer does not address all of the circumstances that may come within or fall outside clause 28. The answer is concerned only with the seizure of a cargo and with that seizure by a customs authority that is a State revenue authority acting in a sovereign capacity”.
This judgment gives some welcome publicly-available guidance on the interpretation of a force majeure clause in a standard form widely used in sugar trading. While the charterers were successfully able to rely on the force majeure clause in this case, it does not signal a change in the strict and narrow approach typically adopted by the English courts.
Source: Baltic Exchange
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Thursday, 21 May 20
KOMIPO INVITED BIDS FOR TOTAL 610000 MT OF LCV AND HCV COAL FOR 2H 2020
COALspot.com: South Korea’s Korea Midland Power Co. Ltd. (KOMIPO) has Issued an International Tender for 130,000 mt of 5700 NCV coal an ...
Wednesday, 20 May 20
ADARO ENERGY BOOKED A 5% INCREASE IN COAL PRODUCTION VOLUME Y-O-Y IN 1Q2020
PT. Adaro Energy Tbk, Indonesia’s one of the largest coal miner, booked a 5% increase in coal production volume year-over-year in 1Q2020. The ...
Wednesday, 20 May 20
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MARKET INSIGHT
Seafarers keep maritime trade going so that the food, raw materials, energy and manufactured goods on which so many depend can continue moving arou ...
Tuesday, 19 May 20
AMENDMENT OF THE INDONESIAN MINING LAW: TYING UP LOOSE ENDS - UMBRA
KNOWLEDGE TO ELEVATE
The finalized draft of Law on the amendment of the Mining Law (Bill) was publicly released on 11 May 2020 and was then ap ...
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- Parliament of New Zealand
- San Jose City I Power Corp, Philippines
- Savvy Resources Ltd - HongKong
- Karbindo Abesyapradhi - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Ambuja Cements Ltd - India
- Toyota Tsusho Corporation, Japan
- PetroVietnam Power Coal Import and Supply Company
- Deloitte Consulting - India
- Larsen & Toubro Limited - India
- Sarangani Energy Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Tata Chemicals Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Global Business Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Commonwealth Bank - Australia
- Africa Commodities Group - South Africa
- Mjunction Services Limited - India
- Videocon Industries ltd - India
- Electricity Authority, New Zealand
- Gujarat Sidhee Cement - India
- Bulk Trading Sa - Switzerland
- Standard Chartered Bank - UAE
- White Energy Company Limited
- Trasteel International SA, Italy
- Gujarat Electricity Regulatory Commission - India
- Binh Thuan Hamico - Vietnam
- Wood Mackenzie - Singapore
- Planning Commission, India
- Orica Australia Pty. Ltd.
- Coastal Gujarat Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- Indonesian Coal Mining Association
- Parry Sugars Refinery, India
- London Commodity Brokers - England
- Attock Cement Pakistan Limited
- Tamil Nadu electricity Board
- Dalmia Cement Bharat India
- Central Java Power - Indonesia
- The State Trading Corporation of India Ltd
- Gujarat Mineral Development Corp Ltd - India
- Metalloyd Limited - United Kingdom
- Cement Manufacturers Association - India
- Samtan Co., Ltd - South Korea
- India Bulls Power Limited - India
- Wilmar Investment Holdings
- Timah Investasi Mineral - Indoneisa
- Interocean Group of Companies - India
- Riau Bara Harum - Indonesia
- Oldendorff Carriers - Singapore
- Siam City Cement - Thailand
- Pendopo Energi Batubara - Indonesia
- The Treasury - Australian Government
- Minerals Council of Australia
- Bangladesh Power Developement Board
- Sical Logistics Limited - India
- Indian Energy Exchange, India
- Ind-Barath Power Infra Limited - India
- The University of Queensland
- Bahari Cakrawala Sebuku - Indonesia
- Kobexindo Tractors - Indoneisa
- Ministry of Transport, Egypt
- Leighton Contractors Pty Ltd - Australia
- Singapore Mercantile Exchange
- Billiton Holdings Pty Ltd - Australia
- Vizag Seaport Private Limited - India
- SMG Consultants - Indonesia
- Rio Tinto Coal - Australia
- Kalimantan Lumbung Energi - Indonesia
- Heidelberg Cement - Germany
- Energy Development Corp, Philippines
- Borneo Indobara - Indonesia
- Medco Energi Mining Internasional
- Grasim Industreis Ltd - India
- Power Finance Corporation Ltd., India
- Salva Resources Pvt Ltd - India
- Ministry of Finance - Indonesia
- Bayan Resources Tbk. - Indonesia
- Lanco Infratech Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Energy Link Ltd, New Zealand
- Latin American Coal - Colombia
- McConnell Dowell - Australia
- Directorate Of Revenue Intelligence - India
- Holcim Trading Pte Ltd - Singapore
- New Zealand Coal & Carbon
- Indika Energy - Indonesia
- Bhushan Steel Limited - India
- Eastern Energy - Thailand
- AsiaOL BioFuels Corp., Philippines
- Anglo American - United Kingdom
- Meralco Power Generation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Indian Oil Corporation Limited
- European Bulk Services B.V. - Netherlands
- Sakthi Sugars Limited - India
- Intertek Mineral Services - Indonesia
- Port Waratah Coal Services - Australia
- Altura Mining Limited, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Goldman Sachs - Singapore
- Banpu Public Company Limited - Thailand
- Essar Steel Hazira Ltd - India
- ICICI Bank Limited - India
- Iligan Light & Power Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Kepco SPC Power Corporation, Philippines
- Bhatia International Limited - India
- Formosa Plastics Group - Taiwan
- ASAPP Information Group - India
- Globalindo Alam Lestari - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- South Luzon Thermal Energy Corporation
- Aditya Birla Group - India
- Straits Asia Resources Limited - Singapore
- Economic Council, Georgia
- MS Steel International - UAE
- IEA Clean Coal Centre - UK
- Mercator Lines Limited - India
- PNOC Exploration Corporation - Philippines
- CNBM International Corporation - China
- Petron Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- SN Aboitiz Power Inc, Philippines
- Barasentosa Lestari - Indonesia
- SMC Global Power, Philippines
- Meenaskhi Energy Private Limited - India
- Semirara Mining Corp, Philippines
- Orica Mining Services - Indonesia
- Thiess Contractors Indonesia
- Aboitiz Power Corporation - Philippines
- Romanian Commodities Exchange
- Vedanta Resources Plc - India
- Bharathi Cement Corporation - India
- Global Coal Blending Company Limited - Australia
- Thai Mozambique Logistica
- Sojitz Corporation - Japan
- Global Green Power PLC Corporation, Philippines
- Kumho Petrochemical, South Korea
- Simpson Spence & Young - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Malabar Cements Ltd - India
- Siam City Cement PLC, Thailand
- Xindia Steels Limited - India
- GMR Energy Limited - India
- Price Waterhouse Coopers - Russia
- Asmin Koalindo Tuhup - Indonesia
- Baramulti Group, Indonesia
- GAC Shipping (India) Pvt Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- CIMB Investment Bank - Malaysia
- Sindya Power Generating Company Private Ltd
- Miang Besar Coal Terminal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- VISA Power Limited - India
- Edison Trading Spa - Italy
- IHS Mccloskey Coal Group - USA
- Mercuria Energy - Indonesia
- Central Electricity Authority - India
- Antam Resourcindo - Indonesia
- Sree Jayajothi Cements Limited - India
- Ministry of Mines - Canada
- Australian Coal Association
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Krishnapatnam Port Company Ltd. - India
- Independent Power Producers Association of India
- Star Paper Mills Limited - India
- Kapuas Tunggal Persada - Indonesia
- Bhoruka Overseas - Indonesia
- Eastern Coal Council - USA
- Manunggal Multi Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Maheswari Brothers Coal Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Mintek Dendrill Indonesia
- Makarim & Taira - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Carbofer General Trading SA - India
- Chamber of Mines of South Africa
- TeaM Sual Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Posco Energy - South Korea
- Therma Luzon, Inc, Philippines
- PowerSource Philippines DevCo
- Agrawal Coal Company - India
- Kartika Selabumi Mining - Indonesia
- Jindal Steel & Power Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Madhucon Powers Ltd - India
- PTC India Limited - India
- Indo Tambangraya Megah - Indonesia
- Georgia Ports Authority, United States
- Bukit Baiduri Energy - Indonesia
- Indogreen Group - Indonesia
- Uttam Galva Steels Limited - India
- Kaltim Prima Coal - Indonesia
- Bukit Makmur.PT - Indonesia
- Jaiprakash Power Ventures ltd
- Coal and Oil Company - UAE
- Kideco Jaya Agung - Indonesia
- Renaissance Capital - South Africa
- Merrill Lynch Commodities Europe
- Australian Commodity Traders Exchange
- Ceylon Electricity Board - Sri Lanka
- OPG Power Generation Pvt Ltd - India
- Marubeni Corporation - India
- Coalindo Energy - Indonesia
- Electricity Generating Authority of Thailand
- Directorate General of MIneral and Coal - Indonesia
- GVK Power & Infra Limited - India
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